WPP numbers down as clients ‘get there ugly’
There were few Australian highlights in WPP’s financial results for 2009 which were released over the weekend.
None of the giant marketing group’s media or advertising agencies in Australia performed sufficiently well to warrant a mention in the company’s numbers which saw headline profits and like-for-like revenue both down.
The only companies whose Australian performance even warranted a positive mention in the WPP report were branding house Landor, research company Millward Brown and G2 sales promotion.
WPP’s global headline profit before tax was down by 16% to about $812m.
The company is led by Sir Martin Sorrell. In the accompanying commentary on the results, WPP warned that one issue holding back the advertising bounceback is an unwillingness to invest in brands. it said:
“Consumers and clients exhibit continued caution – consumers concerned about high levels of unemployment and clients continually conservative in a low growth environment, achieving lowered market profit expectations, by getting there ugly, by cutting costs and focusing on efficiency. Sadly, the fact that you cannot cost-cut your way to prosperity has not been accepted – as yet. Long-term growth depends on brand building and revenue growth.”
And the company added:
“2009 was a year when no sensible company took anything – or anyone – for granted. Just because it had worked before, it didn’t mean it would work again. Just because a consumer had been a brand loyalist for 9 consecutive years, it didn’t mean you should count on his or her custom for a 10th. Everything needed re-examination: not for the sake of making aimless change; much more for the sake of making certain.
“Though always uncomfortable, years when all accepted practice is subjected to fierce scrutiny and challenge invariably turn out to be fruitful ones – and 2009 was no exception. The open-mindedness and good-humoured resilience of WPP companies has been exemplary and their response full-blooded. Inventiveness soared. Their clients are by far the best witnesses to this claim – but the results of creative awards, in all disciplines and in all parts of the world, confirm a remarkable advance, over both previous years and our principal competitors.
“All too easily, such an admirable response to tough times tends to get de-humanised – it gets disguised in amalgamated figures and broad generalities. So we would like to close this report by reminding all our audiences of a permanent truth of our business. It is a business that is wholly dependent on the intelligence, the talent, the integrity and the determination of each individual member of each of our companies.”
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
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This passage caught my eye……”So we would like to close this report by reminding all our audiences of a permanent truth of our business. It is a business that is wholly dependent on the intelligence, the talent, the integrity and the determination of each individual member of each of our companies.” …..kinda make you wonder why they treat their people so poorly??
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